Outotec


Outotec Oyj was a Finnish listed technology company as well as project company, selling complex mining technology and plant projects that it first designs and then executes itself or in collaboration with its partners. The company purchases the majority of its products from subcontracted manufacturers, making only the key components itself.
Manufacturing is carried out at Outotec's workshop in the city of Outokumpu, which makes equipment, and at Lappeenranta plant, where industrial filters are manufactured.
Outotec delivers its technologies and processes for metallurgy and mineral processing. Outotec's technologies are used for applications such as producing base metals, processing iron ore, ferroalloys, and raw materials containing titanium, producing sulfuric acid, producing aluminium oxide and light metals, processing exhaust gases, coking, producing bioenergy, refining oil shale and oil sands, and treating industrial wastewater. Processes developed by Outotec enable aluminiferous clay, paper sludge, and slag heaps created during the process to be converted into raw materials for synthetic sapphire, biorefineries, or copper.
Outotec's environment and energy business has grown alongside its traditional ore and metal technology. Mines and refineries consume enormous quantities of water and energy, but Outotec's applications enable a significant reduction in consumption. Outotec has been ranked among the world's 10 most responsible companies by Corporate Knights' yearly listing several times, for example in 2018.
The company was created when Outokumpu Oyj spun off its technology business into a separate entity in 2006.
In July 2019, it was announced that Metso and Outotec are planning to combine Metso's Minerals business unit with Outotec. The new company will be called Metso Outotec. In June 2020, Metso Corporation and Outotec Oyj completed the combination of Metso’s Minerals business and Outotec to form a company called Metso Outotec.

Organization

On June 30, 2020 Metso Corporation and Outotec Oyj completed the combination of Metso’s Minerals business and Outotec to form a company called Metso Outotec.
In 2018, Outotec had sales and service centers in 36 countries on six continents and three business units.
In 2017, Outotec's operations consisted of two parts of almost equal size, one focusing on mining technology and the other focusing on technologies for refining metals. The company's third pillar was its environment and energy business, which expanded thanks to the 2011 acquisition of Energy Products of Idaho. In 2017, a considerable proportion of the company's design work took place in Finland. The headquarter is in Espoo, Finland, employed 800 personnel, and the company also had a large design unit in Germany.
Outotec's competitive position varies depending on the technology, but its competitiveness is strong in areas such as flash smelting, flotation cells for concentrating plants, and grinding mills. A further area of strength is copper mines, for which the company can supply all of the main equipment.

Metals, energy and water

In 2012, the base metals business generated 80 percent of net sales, and energy, light metal, and environmental solutions brought in almost half a billion euros of revenue. In 2017, approximately 77 percent of net sales consisted of metal technologies, and technologies related to energy generation accounted for 7 percent of net sales. Other areas generated 12 percent of net sales.

Minerals processing

The business area focuses on minerals processing for the mining industry, conducting a range of works such as preliminary suitability studies, as well as implementing entire production plants and supporting them throughout the various phases in their lifecycles.

Services

The Services unit's business ranges from individual deliveries of spare parts to extensive, long-term operation and maintenance agreements.

History

Outotec as a part of Outokumpu, 1940–2006

In the 1940s, the Finnish state's copper company, Outokumpu, had a problem: it needed electricity to refine metal, but there was a shortage of electricity in Finland. A solution was found in a proposal to manufacture copper without using external energy. The flash smelting method uses the sulfur present in the ore. The invention marked the first chapter in Outotec's story. On the back of the success of flash smelting, Outokumpu, a state-owned enterprise, established a technology unit, which later became known as Outokumpu Technology. Japanese and Indian businesses that had taken interest in the invention in the 1950s became customers in the 1970s. Nowadays, more than half of the world's copper is manufactured using flash smelting technology.
The invention brought Outokumpu international success in copper, nickel, cobalt, zinc, steel, and sulfuric acid technologies, and the company began establishing sales offices in Canada, the United States, Mexico, Brazil, Chile, and Peru. Outokumpu expanded its technology expertise with the help of mergers, acquiring aluminum expertise in Canada and Germany and process technology for gas processing and precious metals in Sweden. An important acquisition took place in 2001 when Lurgi Metallurgie, a 100-year-old German company, was purchased, bringing expertise in areas such as sulfuric acid production technology. In 2010, President and CEO Pertti Korhonen's assessment was that Outotec's success was as much due to Lurgi as it was to Outokumpu's technology unit.

The birth of Outotec, 2006–2007

In spring 2006, Outokumpu Oyj spun off its technology division into a new company named Outokumpu Technology Oyj, and it sold 80 percent of the company's stock to external investors in the fall of the same year. The company was listed on the Helsinki Stock Exchange in October 2006 and changed its name to Outotec Oyj in April 2007. Outokumpu received EUR 360 million for its technology unit in connection with the listing.

Outotec, 2007–2009

In 2007, Outotec's market capitalization rose to almost EUR 2.5 billion, and between 2005 and 2008, the company's net sales more than doubled from EUR 0.5 billion to more than EUR 1.2 billion. In 2008, capital invested in the company returned an incredible 67 percent. In 2013, Outotec surpassed Outokumpu in terms of market capitalization. In 2007, Outotec acquired Chena, and in the following year, it acquired Auburn Group.

Outotec, 2010–2015

In 2010, Pertti Korhonen became the company's president and CEO when his predecessor, Tapani Järvinen, retired. Several companies were acquired in the same year: Larox, Millteam, Ausmelt, and Edmeston, and Outotec decided to specialize in developing technology for renewable energy and water treatment in addition to technology for refining minerals and metals.
The corporate acquisitions continued in the following year with the purchases of Kiln Services Australia, Energy Products of Idaho, VPF, and ASH DEC Umwelt. Numcore, Demil Manutenção Industrial, TME Group, and Backfill Specialists were acquired in 2012.
Outotec had a strong order book in 2012, with new opportunities for growth. The company achieved growth in metal technology and in its role as a supplier of solutions for the environment, water, and energy. It recorded more than EUR 2 billion in net sales, with orders 4 percent higher than in the preceding year. Outotec acquired Energy Products of Idaho, a US-based company that generates energy from waste and biomass in North America and Japan.
In 2012, the company also made a strategically important agreement with the city of Zürich for the design and construction of Switzerland's largest and most modern incineration plant for sewage sludge. The agreement was worth EUR 50 million, and it was considered to boost the company's ability to win similar tenders elsewhere. The plant burns sewage sludge to generate energy in the form of electricity and heat. The process creates ash, from which phosphorus can be recovered for use as a fertilizer. The Werdhölzl incineration plant handles approximately 100,000 tons of sewage sludge per year, generating 875 kW of electricity and 4,450 kW of heat.
Between 2009 and 2012, the company's net profit increased from EUR 45 million to EUR 115 million. In 2013, Outotec ranked 34 on the Talouselämä magazine's list of 500 Finland's richest companies, and it was considered an outstanding Finnish success story. The main reason for the success was its investment in emerging markets: two thirds of the company's net sales were generated in Asia, Latin America, Africa, and Eastern Europe.
In 2013, Outotec acquired Australian software technology company Scanalyse, and launched an Employee Share Savings Plan. Every month, employees were given the option of spending 2–5 percent of their gross salary on buying the company's shares. Employees who participate in the share purchase plan are entitled to subscribe to one extra share at the company's expense for every two shares that they have held for three years. The aim of the plan is to allow every member of personnel to benefit from the company's success. Approximately one third of the company's employees in 22 different countries signed up for the plan, and it received an award from the Global Equity Organization.
In December 2013, Outotec concluded codetermination negotiations, which resulted in the number of personnel decreasing by 101. Approximately half of the reduction took the form of redundancies at the sites in Espoo, Pori, Lappeenranta, and Turku in Finland, while the remainder was due to retirements and the expiry of fixed-term employment contracts. The codetermination negotiations took place against a background of slower investment in the mining industry and cost-cutting.
In spring 2014, Outotec acquired Republic Alternative Technologies Inc, a relatively small US-based company that designed and manufactured stacked titanium anodes for use in metal production. The company employed 18 personnel and it recorded net sales of approximately EUR 9 million in 2013. In the summer, Outotec acquired the business operations and intellectual property of Kalogeo Anlagenbau, an Austrian company that was in liquidation, with the intention of expanding the business and increasing its annual net sales to EUR 15–20 million from 2016 onwards. Kalogeo made products related to treating biomass, sludge, and wastewater. It also designed, constructed, and operated several sludge incineration plants based on fluidized bed technology.
In 2015, Outotec completed four acquisitions: Kempe Engineering, Biomin, Kovit Engineering, and Sinter Plant Services. Outotec acquired Kempe Engineering's aluminum technologies, as well as its service and spare parts businesses in the Middle East and Africa. Outotec acquired a majority of the shares in Biomin South Africa and took a stake in Biomin Technologies, based in Switzerland. In addition, Outotec took ownership of the intellectual property and marketing rights to the BIOX bio-oxidation technology. BIOX is a biological method for dissolving refractory gold ores. Canadian company Kovit Engineering Limited specialized in solutions for treating the tailings from ore enrichment. Outotec acquired Sinter Plant Services to complement its services to the ferrochrome producers in South Africa. Outotec also announced that it was initiating a savings program worth EUR 70 million due to the weaker market environment in the mining and metal industry over the preceding years. Mining markets began to show signs of recovery in 2016.

Outotec 2016-2020

In summer 2016, President and CEO Pertti Korhonen was dismissed and Markku Teräsvasara was appointed to replace him on October 1, 2016. Prior to his appointment, Teräsvasara had served as Director at Atlas Copco.
In May 2017, Teräsvasara commented that the company should not “spiral into cost-cutting and cycles of redundancies. There are also deals to be done: mines and refineries are not closing down, and some customers make small, essential investments, even in bad times. And naturally, there is plenty of maintenance.” One of the first changes that Teräsvasara instigated was to put the Services business into a separate unit.
In July 2019, it was announced that Metso and Outotec are planning to combine Metso's Minerals business unit with Outotec. The new company's headquarters will be in Finland and it will maintain its listing on Nasdaq Helsinki. Before the transaction can be completed, the approval is needed by a majority of two-thirds of votes cast and shares represented at the respective EGMs of Metso and Outotec, as well as regulatory approvals.

Customers

In 2012, 46 percent of sales were made in the EMEA area, which includes the EU, the Commonwealth of Independent States, the Middle East, and Africa. Africa is considered to be a clear growth area for the company, as are India and China, where environmental legislation is becoming more stringent. Examples of stricter legislation include Zürich, where the city council has purchased a modern sewage sludge incineration plant from Outotec, and Turkey, where Outotec technology is used to generate energy from chemical wood pulp waste.
Outotec designed the world's largest factory complex for manufacturing sulfuric acid in Saudi Arabia, a contract worth a total of US$240 million, with technology accounting for half of the contract value. The sulfuric acid produced by the factory is used to make fertilizers.
The company's largest ever deal was completed in 2012 with a company named Cristal Global: an ilmenite smelter worth EUR 350 million was purchased for construction in Saudi Arabia.
In spring 2013, Outotec made an agreement with the Russian Copper Company on the design and realization of a new copper concentrating plant in Chelyabinsk, Russia. The order was worth more than EUR 50 million, and the deal included flotation cells, thickeners, analyzers, and automation.
In spring 2014, Outotec received an order worth EUR 50 million from Alumina do Norte do Brasil. Majority-owned by Norwegian aluminum producer Norsk Hydro ASA, Alunorte's alumina refinery is the largest in the world. A new filtration plant was ordered for the refinery, located in
Barcarena in Northern Brazil, to enable dry storage of caustic residue. The plant is due to be started up in March 2016.
Outotec also gains customers through urgent necessity. The air in the small city of Tsumeb in Namibia was difficult to breathe, due to decades of sulfur gas emissions from the copper smelter. When the smelter was taken over by a new owner, Canadian mining company Dundee was forced to rein in emissions in order to retain its operating permit. Dundee ordered a sulfuric acid plant from Outotec at a price of EUR 130 million to process the gases produced during copper smelting. Measurements have shown that the new plant has reduced sulfur gas emissions by more than 80 percent.
In spring 2017, Outotec took its largest order for two years. Bahraini company Aluminium Bahrain ordered the design and delivery of an anode rodding shop facility for its aluminum smelter expansion. In addition to the rodding shop, the transaction included a solution for recovering and processing used anodes, as well as process equipment based on the company's product development.

Partners

Outotec invests approximately five percent of its net sales into research and development. In 2016, the total investment was EUR 55 million. At the end of 2016, Outotec had 786 patent families, encompassing 6,772 national patents or patent applications.
Outotec has two research centers. The center in Frankfurt researches technologies related to refining iron ore and aluminum as well as fluidized bed technology, while the center in Pori researches base metals. The centers study materials such as ore samples submitted by customers. On the basis of analysis, a process solution can be proposed to enable the ore to be exploited more efficiently. Samples have already been collected from almost every mine in the world. The company also has a laboratory in Lappeenranta focusing on water extraction.
Outotec invented the fluidized bed technology. It strengthened its expertise in the area by acquiring German company Lurgi at the beginning of the 2000s. Outotec uses the technology in metallurgy processes and for renewable and alternative energy.
Outotec set a record for patent applications in 2012, when it applied for 70 new patents and was granted 286 national patents, making it the fourth-largest company in Finland in terms of patent applications. In 2013, Outotec submitted 68 patent applications – more than any other company in Finland.
In January 2013, Outotec sued Outokumpu over the rights to an invention related to the ferrochrome manufacturing method. An arbitral award was made in August 2015, judging that both companies hold joint title over the method.

Awards